Information and model client letter on the new 'nanny tax' rules.
The Tax Adviser › Vol. 26 Nbr. 2, February 1995
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Summary
The American Institute of CPAs suggests that firms send clients a letter detailing changes in the reporting requirements for social security taxes and withholding for domestic workers. This simplification of the nanny taxes has reduced the compliance burden on employers by not requiring that quarterly returns be prepared on a Form 1040. The taxes are only applicable if annual wages exceed $1,000, and employees under 18 are exempt from withholding unless the work is their principle occupation.
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Extract
Information and model client letter on the new 'nanny tax' rules.
Several Clinton Administration nominations in 1993 brought into the national spotlight the issue of what is now commonly referred to as the "nanny tax." On Oct. 22, 1994, President Clinton signed into law a bill that simplifies how employers will report and pay Social Security taxes for their domestic employees.
While the AICPA was concerned with specific aspects ...See the full content of this document
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